Hendren Group are advising clients on Royal bank of Scotland as W&G Investments Plc makes public their offer to buy branches.
Hendren Group is a financial management and investment company dealing with investment methods and strategies. Based in Tokyo boasting a large base of private clients and a well skilled team of advisors, they conduct research and then subsequently develop short and long-term systematic approaches to achieving optimum returns on investments for themselves, their associates and for their current client base.
After receiving £45.5 billion of state aid following the 2008-banking crisis, Royal Bank of Scotland Plc has been ordered by the European Union to sell off 316 of its branches by 2014 to bring it into compliance with E.U banking guidelines. RBS had expressed interest in forming an IPO as part of the sell off after the deal to sell the branches to Spanish bank Banco Santander for 1.7 billion pounds fell through last October.
“The banking sector throughout Europe has taken a knock the last few years following the 2008 financial crisis which led to the total collapse of large financial institutions, the bailout of banks by national governments and downturns within the stock markets. As the economy starts to regain its stability the banking sector is becoming desirable once more and with conditions being applied by the European Union new corporations are ready to take advantage one being W&G who have wanted into the commercial banking sector for some time now and RBS meets that desire very well indeed,” said David Holmes, Senior Vice President of Mergers and Acquisitions at the Hendren Group.
W&G Investments Plc and their backers including Schroders Plc and Lansdowne Partners Ltd have offered 1.1 billion pounds for RBS’s branches with an additional 400 million available if the company’s fillings warrant it. Early statements from both Royal Bank of Scotland and W&G investments would seem to indicate that both parties are agreeable to this deal at least in principle. A statement released by Andrew Higgins the director for W&G said that he felt that the group was the only serious bid to be tendered, whilst the other two bids on the table involved smaller sums of money with an IPO being introduced two years down the line.
The current offer on the table will buy the banking facility in its entirety allowing the bank to continue in path of simply holding deposits from its customers and lending to third parties to make its margin in the middle. The branches RBS has on offer currently hold approximately £21.5 billion in customer deposits from 2 million clients and small businesses, which generated 305 million pounds in operating profit for the bank in 2012.
Hendren Group are of the opinion that if the deal comes to fruition with W&G that the banks potential for growth and stability will continue in the strong path we have seen so far this year. The bank has generated £174 million in operating profit through its client accounts amounting to 10 percent of RBS’s annual total and a ROI of 46.76 percent year to date.
The Hendren Groups Senior Vice President David Holmes concluded, “This is an unusual situation for an acquisition with the European Union heading the procedures by imposing its stipulation on the banking facility to sell off its concerns by a dead line. When a company is under such pressure to sell or divide its holdings, the advantage is in the buyer’s hands, however in this case W&G are making a reasonable offer, which would ensure the banking facilities future and growth continues. Both parties will benefit from the acquisition and this bodes well with potential investors, we will be advising clients as to both concerns involved as the details become finalized.”
Hendren Group is set to continue to advise clients to acquire shares within all markets and sectors globally adding to successful diversified portfolios.